Certain environmental factors are of particular significance in the fermentation of the hemicellulose component of lignocellulosic biomass by yeasts; these are discussed in relation to process considerations with a comparative evaluation of the relevant fermentation parameters. The commercial exploitation of the pentose-fermenting yeasts for ethanol production from D-xylose is restricted mainly by their low ethanol tolerance and slow rate of fermentation, as well as by the difficulty in controlling the rate of oxygen supply at the optimal level. Apart from these intrinsic physiological constraints, the use of lignocellulosic hydrolyzates as substrate presents additional obstacles to an efficient fermentation because of the presence of inhibitors, especially acetic acid and because the fermentation of sugar mixtures introduces further difficulties. Recent developments in the construction of recombinant microorganisms offer good prospects for the commercial production of ethanol from renewable resources.